Draft NPPG: Local Housing Need Assessment Method

Following on from the draft NPPF earlier in the week, the Government published proposed changes to the National Planning Practice Guidance (NPPG) late on Friday afternoon.

This included further details on the standard method of assessing housing need which local authorities will be expected to use.

The main point to note is that it has not changed from the draft methodology first published in the Housing White Paper back in February 2017.

The method involves using the latest national population projections (annual average growth over 10 years) and applying a market signals adjustment based on median affordability ratios. The level of increase is then capped depending on the plan status and current housing target. For further details on the exact methodology see the draft document here

Other key points on the implementation of the standard method include;

These figures should be seen as the minimum starting point. There may be circumstances where it is justifiable to identify a higher need figure.

Plan-making authorities should use the standard method for assessing local housing need unless there are exceptional circumstances to justify an alternative approach. Any deviation from the method which results in a lower housing need figure than the standard approach will be subject to the tests of soundness and will be tested thoroughly by the Planning Inspectorate at examination.

Local housing need established through the standard method may be relied upon for a period of two years from the time that a plan is submitted to the Planning Inspectorate for examination.

When using the standard method it is not necessary to factor in previous levels of under supply into the calculation of local housing need, since any such under delivery will be reflected in the affordability adjustment. However where an alternative approach is taken, past delivery should be taken into account.

Plans should normally be reviewed every 5 years however if the local housing need figure for an area is higher than that identified in the relevant plan, a review may be needed earlier. Where neighbouring authorities have adopted plans that do not meet all of their local housing need, an earlier review may also be necessary to assess whether that unmet need can be planned for.

For the time being, the local authority level housing need figures calculated using the standard methodology published alongside the Housing White Paper are still valid. However, the 2017 affordability ratios are due to be published very soon and the 2016 based household projections are due later this year. Both of these have the potential to significantly impact the housing need calculations. We will be keeping an eye on the publication of these datasets and will be producing further analysis on the impact shortly afterwards.